Survival Tactics for Public Companies

Employees used as strategic assets.

International Assets Holding Corp. led the Fortune 500’s list for one-year growth in revenue, revenue per dollar of assets, revenue per dollar of equity and revenue per employee.

Select has become PSS’ fastest-growing product line. The label helped PSS hold its own in 2008, posting a 6.6% revenue increase over 2007. An 8% drop in physician-business revenue between January and March appeared to threaten Smith’s growth goals for 2009. But in May, he announced PSS had exceeded its goal — with 17% earnings-per-share growth, excluding a 4-cent gain on the sale of a securities interest — thanks in part
to increasing sales in the elder-care division.

Keeping revenue healthy through the downturn may be a tougher task. While PSS expects parts of the healthcare industry, such as elder care and pediatrics, to remain strong despite the recession, physicians are looking to cut their office expenses, and many Americans are skimping on all but the most essential medical care.

Smith’s strategy for carrying PSS through the recession boils down to helping his customers through the recession. For example, PSS develops technologies to make doctors’ offices more efficient, including software to speed up insurance reimbursement. PSS recently rolled out SmartScan wands to help its customers — rather than PSS salespeople — manage their inventory of supplies. Smith estimates the wands have freed up more than 40% of his salespeople’s workdays, allowing them to spend more time with doctors. “You have to stay very close to your customer to solve their biggest problems,” Smith says.

In trying to avoid layoffs, Smith is asking employees to embrace tried-and-true tactics, like controlling expenses and maximizing efficiency; the company is going through a production overhaul known as “leaning.” In an effort to link medium and message as he communicates strategy, Smith downscaled the April town hall meeting, gathering his employees in the Florida sun and standing on the bed of a pickup truck to tell them about his plan to save jobs.

Longer term, Smith is counting on those un-laid-off employees to figure out ways to keep the company growing — another message communicated at the April meeting when he announced a 5% pay cut for all company officers and a 2% raise for all other staffers.

“How empowering do you think that is to your people?” he asks. “In a world where no one trusts their CEOs and their leaders, we have a great deal of trust from our people. That in turn makes them focused on solutions — solutions for our company, and more important, solutions for our customers.”

Lennar (No. 16)

Ahead of
the Curve
Small comfort to anyone who bought Miami-based Lennar shares in 2005 at $67 — it traded last month for $10 — but Lennar saw bad times coming and more than others moved to bolster its financials by cutting inventory and conserving cash. In April, Moody’s raised its ratings outlook; Lennar sold $400 million in senior notes, eliminating the liquidity cloud over it. The nation’s second-largest builder started a vulture fund to snatch bargains.Lennar CEO Stuart Miller (left):
The company started a vulture fund, hoping to capitalize on depressed properties.